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Medicare Supplement Plans

Medicare Supplement Plans (Also Known as Medigap)

“It’s important to compare Medigap policies since the costs can vary between insurance companies for exactly the same coverage, and may go up as you get older…

Every Medigap policy must follow federal and state laws designed to protect you, and they must be clearly identified as “Medicare Supplement Insurance.” Insurance companies can sell you only a “standardized” policy identified in most states by letters A through D, F, G, and K through N. All policies offer the same basic benefits, but some offer additional benefits so you can choose which one meets your needs.”

—Medicare & You Handbook 2020

When thinking about Medicare Supplements Plans it is important to keep in mind the basic coverage is standardized. That means the core benefits are regulated by Medicare, but the cost for each plan can vary by company, your age, state and even your zip code. For example, you may have signed up for a very cost-effective plan with an insurance company at age sixty-five, but by the time you reach seventy-five it may not be the lowest priced plan. You could now be paying a higher rate for the same coverage. Here are three things you can do to lower your rate.

Compare your rate to the competition using the California Rule.
California allows Medigap members to switch insurance companies, with no new underwriting, so long as the plan they move to has equal or lower benefits. They can make the move during the 30 days following the member’s birthday, thus the name Birthday Rule. This means that even if you have a medical condition that might disqualify from switching plans, you can price shop and compare using this exemption in California.

Take on more risk.
Insurance companies adjust their rates based on the amount of risk that they are willing to take on. You can do this too by taking on more risk, for example you could switch from an F Plan to a G Plan. You will now be responsible for the Doctor Deductible payments, but once you’ve met that deductible your coverage will once again be similar to your F Plan for the rest of that calendar year. And remember, if believe that you will be denied coverage due to a medical condition you can shop for a lower rated plan during your birthday month using California’s Birthday rule.

You can shop for a Medicare Advantage plan.
Each year more people are switching to Advantage plans, the reason is simple: cost savings. This is especially true due to the lowering of Maximum out of Pocket expenses (MOOPs) for many plans. Advantage plans are not for everyone, you will lose many of the freedoms associated with being on Original Medicare by doing so, but many are finding the cost savings too attractive to pass up.

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For more information about Medicare Supplement Plans or to see if they’re right for you, call Jim at (714) 418-4040 or click here to schedule a consultation online.


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